IMF confirms world economy in recession by COVID-19 spread and response against pandemic

Completed on 18/03/2020 at 11:00 am

Today kristalina georgieva (Managing Director of the IMF) said in a press conference following the conference call of the International Monetary and Financial Commmitee: “We have reassessed the prospect for growth for 2020 and 2021. It is now clear that we have entered a recession as bad as or worse than in 2009.

We do project recovery in 2021, in fact there may be a sizeable rebound, but only if we succeed with containing the virus everywhere and prevent liquidity problems from becoming a solvency issue.

A key concern about a long- lasting impact of the sudden stop of the world economy is the risk of a wave of bankruptcies and layoffs that not only can undermine the recovery but can erode the fabric of our societies.”

Emerging markets will need for at least $2.5 trill to cope with the COVID-19 impact on their economies

And Kristalina Georgieva continued explaining: “We also see a wide range of problems building up in emerging markets, the spread of the virus, the shut-down of economies, capital outflows and for commodity exporters, a price shock.

Many of these emerging markets will experience a contraction as necessary containment measures take their toll, and are shocked by reduced global demand for their exports – tourism, commodities, and manufactured goods – that provide critical streams of foreign exchange. Our current estimate for the finance needs of emerging markets is $2.5 trillion, a lower- end estimate for which their own reserves and domestic resources would not be sufficient.”

Launch of the policy actions tracker

Countries are taking meassures at their national level to paliate this recession, avoid structural erosion and favor a recovery as fast as possible after COVID-19 contention. The IMF launched a policy actions tracker for 186 countries “to help all to see who is doing what. We will be updating this information regularly and will provide country-specific analysis in line with our surveillance mandate,” the Managing Director of the IMF advanced.

Image over the headline.- Kristalina Georgieva (IMF Managing Director).© IMF

Related eastwind links:

Opening Remarks at a Press Briefing by Kristalina Georgieva following a Conference Call of the International Monetary and Financial Committee (IMFC)

COVID-19 to have devastating effects on all economies, no matter their links to global supply networks, UNCTAD warns

COVID-19.- Sustained reductions in tourism flows, heavily pushing down GDP growth and job creation in OECD members

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